Managing risk is one of the most important parts of running a business, but it often takes a backseat to more pressing daily matters. Take the time to evaluate your business insurance needs on a regular basis. But first, these three steps will help you better understand the process of selecting a policy.

Know your terminology. It can be difficult to sort through your options when you’re confronting brand new terminology at the same time. Before you even meet with an insurance specialist, review the different types of insurance that might apply to your situation. Property insurance covers your actual business property, whereas liability insurance covers the various types of liabilities businesses face (injuries, defamation, and so on). Workers compensation insurance covers injuries to employees and related expenses. Many businesses today also require cyber liability insurance, in addition to a regular liability insurance policy. Some types of insurance combine several of the above options. And depending upon your situation, you might need auto insurance for work-related vehicles.

The bottom line is that you need to learn about all these different types of insurance , so that you understand the benefits and limitations of each as they apply to your situation.

Consider legal requirements. Aside from purchasing the types of insurance that benefit and protect your business, you might actually be required to enroll in certain types of policies. And it’s not just the state that sets requirements; your landlord, mortgage lender, or even client contracts also set their own requirements. Know what is required of you as you shop for insurance, because that is your starting point.

Consider all of the costs involved in a liability event. It can be tempting to satisfy legal requirements with the minimum amount of insurance required. But because one lawsuit can involve so many different expenses, from legal fees to the interruption of your business, it makes sense to realistically analyze the potential costs. In many cases, going with the most affordable insurance policy can backfire in the form of numerous, uncovered expenses. Overestimating your insurance needs is preferable to underestimating them.

Once you’ve got an idea of the types of business insurance you need, give us a call to discuss the options available to you. We can match you with the policies you need, and help you determine if you require anything else.